Asian Shares Mostly Lower; Sydney Weighed By Woodside Selloff

ShriNavaratnam

SINGAPORE (MarketWatch) -- Asian share markets were mostly down Tuesday, with the Sydney market weighed by a selloff in Woodside Petroleum on news that Royal Dutch Shell PLC sold about a third of its stake in the Australian company.

Japan's Nikkei Stock Average was off 0.4%, Australia's S&P/ASX 200 was down 0.5%, South Korea's Kospi Composite was down 0.3% and New Zealand's NZX-50 was flat. Dow Jones Industrial Average futures were down 46 points in screen trade.

Sentiment in the region was dampened by Wall Street's weakness on Monday on renewed worries over debt woes in the euro-zone's periphery nations.

"It's a classic little hangover. The market's been well entertained over recent sessions and was always going to suffer some withdrawal post the stimulus measures," said David Taylor, market analyst at CMC Markets in Sydney.

"Now that the second quantitative easing announcement by the Federal Reserve is out of the way, and the U.S. mid-term elections are a distant memory, the market has chosen to re-focus on Europe," he said.

The Sydney market was hurt by losses in Woodside Petroleum after Royal Dutch Shell sold about a third of its holding in Australia's second-biggest oil and gas producer for A$3.31 billion at A$42.23 per share. Woodside shares were down 5.4% at A$43.38.

BHP Billiton fell 0.7%, while Adelaide Brighton slumped 11% after the company on Monday flagged the potential loss of 50% of a major cement contract in the state of Western Australia.

"I think while QE (quantitative easing) is in place and China remains strong, our market will be OK," said BBY senior institutional trader Peter Copeland. "Obviously there are some capital raisings and strategic selldowns which are adding liquidity to the market. But I don't think that's going to snowball. It doesn't seem like the level of fear of European sovereign debt issues is up to the same level of a few months ago," he said.

Shares in Tokyo were hurt by Europe's debt woes. "The resurgence of uncertainty surrounding Europe is making the shares top-heavy," said Yutaka Miura, senior technical analyst at Mizuho Securities. Twenty two of Topix's 33 subindexes were lower. Shares with exposure to Europe were weak, with Olympus off 2.7% and Canon down 1.1%. Other tech plays were mixed, with Sony up 0.1%, Toshiba up 0.7% and Sharp off 0.4%.

New Zealand shares were flat in sideways trade as investors took to the sidelines after offshore markets' "phenomenal run" recently, said Macquarie Equities broker Brad Gordon. "There is not a lot of (domestic) market-moving news right now," which should keep the index in a narrow range, he said.

Blue-chip stocks were mixed, with Auckland Airport off 0.5% and Fletcher Building 0.2% higher.

Fisher & Paykel Healthcare was up 1.0% on a pull back by the New Zealand dollar, which was hurt on news that kiwifruit vines in a North Island orchard are suffering from a disease that could destroy them. Any outbreak of the disease could hurt New Zealand's economy as the fruit constitutes around 2.5% of total goods exports.

In foreign exchange markets, the euro was weaker against the greenback and the yen as risk appetite ebbed in the face of renewed European debt concerns.

The single currency was fetching $1.3859 against the dollar, from $1.3921 late Monday in New York, and at Y112.53 against the yen, from Y112.99. The dollar was buying Y81.19, compared with Y81.17.

Mike Jones, currency strategist at the Bank of New Zealand, said the euro is likely to come under further pressure as long as investors remain nervous about the debt situation in Europe.

"The spread between Irish and German 10-year bonds (yields) increased to a fresh all-time high," which also continues to weigh on the euro, he said. "Aside from the sliding euro, rising risk aversion also underpinned the U.S. dollar," Jones added.

Lead December Japanese government bond futures were up 0.05 at 142.81 points with investors cautious ahead of a 40-year JGB auction later in the day. The 10-year cash JGB yield was up 0.5 basis point at 0.960%.

Spot gold was at $1,404.70 per troy ounce, down $5.50 from Monday's New York close.

December Nymex crude oil futures were down 40 cents at $86.64 per barrel on Globex.

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